InterDigital Inc.

10/30/2025 | Press release | Distributed by Public on 10/30/2025 06:35

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
The following discussion should be read in conjunction with the unaudited, condensed consolidated financial statements and notes thereto contained in Part I, Item 1 of this Quarterly Report on Form 10-Q, in addition to our 2024 Form 10-K, other reports filed with the SEC and the Statement Pursuant to the Private Securities Litigation Reform Act of 1995 - Forward-Looking Statementsbelow.
Throughout the following discussion and elsewhere in this Quarterly Report on Form 10-Q, we refer to "catch-up revenue." For variable and dynamic fixed-fee license agreements, "catch-up revenue" primarily represents revenue associated with reporting periods prior to the execution of the license agreement.
New Agreements
During third quarter 2025, we signed four patent license agreements, including with Honor Device Co., Ltd. ("Honor"), a major Chinese smartphone vendor. We now have eight of the ten largest smartphone vendors and approximately 85% of the entire global smartphone market under license.
Disney Proceedings
In September 2025, we were awarded a preliminary injunction against Disney by a court in Brazil. The court ruled that we are entitled to a preliminary injunction over Disney's infringement of two InterDigital patents related to AVC and HEVC video coding technology. The decision followed the publication of an independent expert report, commissioned by the Rio de Janeiro court, which fully supported our position that Disney infringed both of the patents-in-suit, and that InterDigital does not have a RAND obligation arising from the asserted encoder claims. The Appellate Court initially granted Disney's request to stay the preliminary injunction pending hearing of an appeal, but that stay was lifted. Disney now has until November 30, 2025, to comply fully with the injunction.
For more information on the Disney proceedings, see Note 6, "Litigation and Legal Proceedings," to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Deep Render Acquisition
In October, we acquired Deep Render, an AI startup with a team of world-class AI experts focusing on video codecs. We believe the acquisition adds significant depth to our existing AI expertise and strengthens the company's leadership in video compression. The transaction also adds Deep Render's patent portfolio in AI-based video coding to our market-leading video portfolio. As part of the deal, a team of AI experts will join our Video Lab.
Founded in London in 2018, Deep Render has pioneered the use of AI in video and image compression to change the way that video is processed and ultimately distributed to connected devices and services.
Return of Capital to Shareholders
In September 2025, we announced a second dividend increase during 2025, increasing the quarterly cash dividend by $0.10 per share to $0.70 per share, beginning with the quarterly dividend paid in fourth quarter 2025. Combined with previous increases, we have increased the dividend by 75% since the start of 2024. During third quarter 2025, we returned $53.3 million to shareholders, including $18.0 million, or $0.70 per share, of cash dividends declared and $35.3 million through the repurchase of shares of common stock.
As of October 30, 2025, there was $147.9 million remaining under the share repurchase authorization, which we plan to utilize to periodically repurchase additional common shares. See Part II, Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds-Issuer Purchases of Equity Securitiesof this Quarterly Report on Form 10-Q.
Cash & Short-term Investments
As of September 30, 2025, we had $1.3 billion of cash, restricted cash, and short-term investments and approximately $1.6 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under the Lenovo arbitration.
91% of our third quarter 2025 revenue is from fixed-fee agreements. Such agreements often have prescribed payment schedules that are uneven and sometimes front-loaded, resulting in timing differences between when we collect the cash payments and recognize the related revenue.
The following table reconciles the timing differences between cash receipts and recognized revenue during the three and nine months ended September 30, 2025 and 2024, including the resulting operating cash flow (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
Cash vs. Non-cash revenue: 2025 2024 2025 2024
Fixed fee cash receipts (a)
$ 492,020 $ 160,300 $ 676,739 $ 384,990
Other cash receipts (b)
8,390 9,919 41,834 35,275
Change in deferred revenue (119,991) (50,495) (48,785) 3,913
Change in receivables (228,066) (11,220) (27,661) 95,128
Other 12,329 20,175 33,658 96,408
Total Revenue $ 164,682 $ 128,679 $ 675,785 $ 615,714
Net cash provided by operating activities $ 395,930 $ 77,631 $ 481,059 $ 79,494
(a) Fixed fee cash receipts are comprised of cash receipts from Dynamic Fixed-Fee Agreement royalties, including the associated catch-up revenue.
(b) Other cash receipts are primarily comprised of cash receipts related to our variable patent royalty revenue and catch-up revenue.
When we collect payments on a front-loaded basis, we recognize a deferred revenue liability equal to the cash received and accounts receivable recorded which relate to revenue expected to be recognized in future periods. That liability is then reduced as we recognize revenue over the balance of the agreement. The following table shows the projected amortization of our current and long term deferred revenue as of September 30, 2025 (in thousands):
Deferred Revenue
Remainder of 2025 $ 106,666
2026 169,365
2027 132,265
2028 1,141
2029 1,206
Thereafter 1,270
Total Revenue $ 411,913
Revenue
Third quarter 2025 revenue of $164.7 million includes $17.7 million of catch-up revenue, while third quarter 2024 revenue of $128.7 million includes $30.0 million of catch-up revenue. The $36.0 million increase was primarily due to recurring revenue recognized from nine patent license agreements signed since third quarter 2024, partially offset by lower catch-up revenue in third quarter 2025. In third quarter 2025, revenue (in descending order) from Samsung, Apple, and Honor each comprised 10% or more of our consolidated revenue. Refer to "Results of Operations --Third Quarter 2025 Compared to Third Quarter 2024" for further discussion of our 2025 revenue.
Impact of Macroeconomic and Geopolitical Factors
We have been actively monitoring the impact of the current macroeconomic environment in the U.S. and globally characterized by market volatility, inflation, supply chain issues, high interest rates, tariffs and other potential trade-related sanctions, and the potential for a recession. These market factors, as well as the impacts of the Ukraine-Russia and Middle East conflicts, have not had a material impact on our business to date. However, if these conditions continue or worsen, they could have an adverse effect on our operating results and our financial condition.
Comparability of Financial Results
When comparing third quarter 2025 financial results against other periods, the following items should be taken into consideration:
Revenue
•Our third quarter 2025 revenue includes $17.7 million of catch-up revenue primarily related to the new patent license agreement with Honor signed in third quarter 2025.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", in the notes to consolidated financial statements included in our 2024 Form 10-K. A discussion of our critical accounting policies, and the estimates related to them, are included in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K. There have been no material changes to our existing critical accounting policies from the disclosures included in our 2024 Form 10-K. Refer to Note 1, "Basis of Presentation," in the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for updates related to new accounting pronouncements and changes in accounting policies.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash, cash equivalents, and short-term investments, as well as cash generated from operations. We believe we have the ability to obtain additional liquidity through debt and equity financings. From time to time, we may engage in a variety of transactions to augment our liquidity position as our business dictates and to take advantage of favorable interest rate environments or other market conditions, including the incurrence or issuance of debt and the refinancing or restructuring of existing debt. Based on our past performance and current expectations, we believe our available sources of funds, including cash, cash equivalents, short-term investments, and cash generated from our operations, will be sufficient to finance our operations, capital requirements, debt obligations, existing stock repurchase program, dividend program, and other contractual obligations discussed below in both the short-term over the next twelve months, and the long-term beyond twelve months.
Cash, cash equivalents, restricted cash, and short-term investments
As of September 30, 2025 and December 31, 2024, we had the following amounts of cash and cash equivalents, restricted cash, and short-term investments (in thousands):
September 30, 2025 December 31, 2024
Increase / (Decrease)
Cash and cash equivalents $ 840,270 $ 527,360 $ 312,910
Restricted cash included within prepaid and other current assets 8,360 24,187 (15,827)
Short-term investments 422,868 430,848 (7,980)
Total cash, cash equivalents, restricted cash, and short-term investments
$ 1,271,498 $ 982,395 $ 289,103
The net increase in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash provided by operating activities of $481.1 million, partially offset by cash used in financing activities of $147.0 million and cash used in investing activities of $55.3 million, excluding sales and purchases of short-term investments. Refer to the sections below for further discussion of these items.
Cash flows provided by operating activities
Cash flows provided by operating activities in the first nine months 2025 and 2024 (in thousands) were as follows:
Nine Months Ended September 30,
2025 2024 Change
Net cash provided by operating activities $ 481,059 $ 79,494 $ 401,565
Our cash flows provided by operating activities are principally derived from cash receipts from patent license agreements, offset by cash operating expenses and income tax payments. The $401.6 million change in cash provided by operating activities was primarily driven by higher cash receipts from timing of cash receipts on existing agreements and new agreements, and was partially offset by higher foreign withholding tax payments on those cash receipts. Additionally, cash operating expenses were lower primarily due to lower revenue share and litigation costs. The table below sets forth the significant items comprising our cash flows provided by operating activities during the nine months ended September 30, 2025 and 2024 (in thousands):
Nine Months Ended September 30,
2025 2024 Change
Total Cash Receipts $ 718,573 $ 420,265 $ 298,308
Cash Outflows:
Cash operating expenses a
(174,518) (258,441) 83,923
Income taxes paid b
(92,711) (37,269) (55,442)
Total cash outflows (267,229) (295,710) 28,481
Other working capital adjustments 29,715 (45,061) 74,776
Cash flows provided by operating activities $ 481,059 $ 79,494 $ 401,565
______________________________
(a) Cash operating expenses include operating expenses less depreciation and disposals of fixed assets, amortization of patents, and non-cash compensation. Amount includes revenue share costs of $7.6 million and $78.7 million in first nine months 2025 and 2024, respectively.
(b) Income taxes paid include foreign withholding taxes.
Cash flows from investing and financing activities
Net cash used in investing activities for first nine months 2025 was $36.9 million, a $176.3 million change from $139.4 million provided by investing activities in first nine months 2024. During first nine months 2025, we sold $18.3 million of short-term marketable securities, net of purchases, and capitalized $55.3 million of patent costs and property and equipment purchases. During first nine months 2024, we sold $173.2 million of short-term marketable securities, net of purchases, and capitalized $35.4 million of patent costs and property and equipment purchases.
Net cash used in financing activities for first nine months 2025 was $147.0 million, a change of $104.0 million from $251.0 million the first nine months 2024. This change was primarily attributable to a $126.2 million payment made on maturity of the 2024 Notes in first half 2024 and $7.3 million of proceeds from the exercise of stock options. This change was partially offset by a $28.9 million increase of taxes withheld on restricted stock unit vestings primarily due to the increased share price at vesting and a $12.2 million increase in dividends paid due to the announced increases in the declared dividend from $0.40 to $0.70.
Other
Our combined short-term and long-term deferred revenue balance as of September 30, 2025 was approximately $411.9 million, a net increase of $51.8 million from December 31, 2024. This increase in deferred revenue was primarily due cash receipts on new and existing patent license agreements, partially offset by amortization of deferred revenue recognized in the period.
Based on current license agreements, we expect the amortization of dynamic fixed-fee royalty payments to reduce the September 30, 2025 deferred revenue balance of $411.9 million by $234.5 million over the next twelve months.
Convertible Notes
See Note 5, "Obligations" to the Notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for definitions of capitalized terms below.
From the period January 1, 2024 through December 31, 2025, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes.
Our 2027 Notes are included in the dilutive earnings per share calculation using the if-converted method. Under the if-converted method, we must assume that conversion of convertible securities occurs at the beginning of the reporting period. The 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any remaining obligations may be settled in cash, shares of the Company's common stock, or a combination thereof. As the principal amount must be paid in cash and only the conversion spread is settled in shares, we only include the net number of incremental shares that would be issued upon conversion. We must calculate the number of shares of our common stock issuable under the terms of the 2027 Notes based on the average market price of our common stock during the applicable reporting period and include that number in the total diluted shares figure for the period.
At the time we issued the 2027 Notes, we entered into the 2027 Call Spread Transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the 2027 Notes by, in effect, increasing the conversion price of the 2027 Notes from our economic standpoint. However, under GAAP, since the impact of the 2027 Note Hedge Transactions is anti-dilutive, we exclude from the calculation of fully diluted shares the number of shares of our common stock that we would receive from the counterparties to these agreements upon settlement.
During periods in which the average market price of our common stock is above the applicable conversion price of the 2027 Notes (initial conversion price of approximately $77.49 per share), or above the strike price of the warrants (weighted average strike price of $105.77 per share), the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share. As a result, in periods where the average market price of our common stock is above the conversion price or strike price, as applicable, under the if-converted method, we calculate the number of shares issuable under the terms of the 2027 Notes and the 2027 Warrant Transactions based on the average market price of the stock during the period, and include that number in the total diluted shares outstanding for the period.
Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the fully diluted earnings per share calculation. As described in Note 5, "Obligations," the 2027 Notes are convertible into cash up to the aggregate principal amount to be converted and any remaining obligations may be settled in cash, shares of the Company's common stock or a combination thereof ("net share settlement"). Assuming net share settlement upon conversion, the following tables illustrate how, based on the $460.0 million aggregate principal amount of the 2027 Notes outstanding as of September 30, 2025, and the approximately 5.9 million warrants related to the 2027 Notes, changes in our stock price would affect (i) the number of shares issuable upon conversion of the 2027 Notes, (ii) the number of shares issuable upon exercise of the warrants subject to the 2027 Warrant Transactions, (iii) the number of additional shares deemed outstanding with respect to the 2027 Notes, after applying the if-converted method, for purposes of calculating diluted earnings per share ("Total If-Converted Method Incremental Shares"), (iv) the number of shares of our common stock deliverable to us upon settlement of the 2027 Note Hedge Transactions and (v) the number of shares issuable upon concurrent conversion of the 2027 Notes, exercise of the warrants subject to the 2027 Warrant Transactions, and settlement of the 2027 Note Hedge Transactions (in thousands):
2027 Notes
Market Price
Per Share 		Shares Issuable Upon Conversion of the 2027 Notes Shares Issuable Upon Exercise of the 2027 Warrant Transactions Total If-Converted Method Incremental Shares Shares Deliverable to InterDigital upon Settlement of the 2027 Note Hedge Transactions
Incremental Shares Issuable (a)
$105 1,588 - 1,588 (1,588) -
$125 2,289 918 3,207 (2,289) 918
$150 2,902 1,760 4,662 (2,902) 1,760
$175 3,340 2,361 5,701 (3,340) 2,361
$200 3,669 2,812 6,481 (3,669) 2,812
$225 3,924 3,163 7,087 (3,924) 3,163
$250 4,129 3,444 7,573 (4,129) 3,444
$275 4,296 3,673 7,969 (4,296) 3,673
$300 4,436 3,864 8,300 (4,436) 3,864
$325 4,554 4,026 8,580 (4,554) 4,026
$350 4,655 4,165 8,820 (4,655) 4,165
$375 4,742 4,285 9,027 (4,742) 4,285
$400 4,819 4,391 9,210 (4,819) 4,391
$425 4,887 4,483 9,370 (4,887) 4,483
$450 4,947 4,566 9,513 (4,947) 4,566
$475 5,000 4,640 9,640 (5,000) 4,640
$500 5,049 4,706 9,755 (5,049) 4,706
______________________________
(a) Represents incremental shares issuable upon concurrent conversion of convertible notes, exercise of warrants and settlement of the hedge agreements.
RESULTS OF OPERATIONS
Third Quarter 2025 Compared to Third Quarter 2024
Revenue
The following table compares third quarter 2025 revenue to third quarter 2024 revenue (in thousands):
Three Months Ended September 30,
2025 2024 Increase/(Decrease)
Smartphone $ 136,407 $ 87,426 $ 48,981 56 %
CE, IoT/Auto 28,219 40,633 (12,414) (31) %
Other 56 620 (564) (91) %
Total Revenue $ 164,682 $ 128,679 $ 36,003 28 %
Catch-up revenue(a), included above
$ 17,678 $ 30,045 $ (12,367) (41) %
(a) Catch-up revenue represents revenue associated with reporting periods prior to the execution of the license agreement.
Total revenue of $164.7 million increased $36.0 million from third quarter 2024 primarily due to revenue from nine new patent license agreements signed in the last twelve months, including the agreement signed with Honor in third quarter 2025 and the previously announced agreements with vivo Mobile and OPPO. Additionally, the Samsung arbitration decision contributed to the increase. These increases were partially offset by catch-up revenue recognized on new agreements and the resolution of litigation in third quarter 2024.
In third quarter 2025 and 2024, 54% and 83%, respectively, of our total revenue was attributable to licensees that individually accounted for 10% or more of our total revenue. In third quarter 2025 and 2024, the following licensees accounted for 10% or more of our total revenue:
Three Months Ended September 30,
2025 2024
Customer A
23% 20%
Customer B
20% 26%
Customer C
11% -%
Customer D <10% 13%
Customer E <10% 12%
Customer F <10% 12%
Operating Expenses
The following table summarizes the changes in operating expenses between third quarter 2025 and third quarter 2024 by category (in thousands):
Three Months Ended September 30,
2025 2024 Increase/(Decrease)
Research and portfolio development $ 53,068 $ 48,331 $ 4,737 10 %
Licensing 19,715 27,467 (7,752) (28) %
General and administrative 16,091 13,539 2,552 19 %
Total Operating expenses $ 88,874 $ 89,337 $ (463) (1) %
Operating expenses remained flat at $88.9 million in third quarter 2025 compared to $89.3 million in third quarter 2024. The $0.5 million decrease in total operating expenses was primarily due to changes in the following items (in thousands):
Increase/(Decrease)
Revenue share $ (4,586)
Intellectual property enforcement, net (2,380)
Other 6,503
Total change in operating expenses
$ (463)
The $0.5 million decrease in operating expenses was due to a number of offsetting changes including a $4.6 million decrease in revenue share costs primarily related to catch-up revenue on agreements signed in third quarter 2024. Additionally, intellectual property enforcement costs, net decreased $2.4 million primarily due to resolutions of the OPPO, Lenovo UK, and Samsung matters, partially offset by increases related to the announced Disney proceedings and a $1.2 million one-time contra expense for a net litigation fee reimbursement resulting from intellectual property enforcement successes received in third quarter 2024.
Research and portfolio development expense: Research and portfolio development expense increased compared to third quarter 2024 primarily due to the costs associated with our growing patent portfolio and increased investment in the computer network that supports our research activities.
Licensing expense:Licensing expense decreased compared to third quarter 2024 primarily due to the above noted changes in revenue share and intellectual property enforcement costs, partially offset by the one-time net litigation fee reimbursement contra expense recognized in third quarter 2024.
General and administrative expense:General and administrative expense increased compared to third quarter 2024 primarily due to an increase in share-based compensation costs.
Non-Operating Income, net
The following table compares third quarter 2025 non-operating income, net to third quarter 2024 (in thousands):
Three Months Ended September 30,
2025 2024 Increase/(Decrease)
Interest expense $ (10,019) $ (10,681) $ 662 6 %
Interest and investment income 9,484 9,175 309 3 %
Other income, net 704 3,379 (2,675) (79) %
Total non-operating income, net $ 169 $ 1,873 $ (1,704) (91) %
The change in non-operating income, net was primarily due to a foreign currency translation net loss arising from translation of our foreign subsidiaries of $0.6 million in third quarter 2025, compared to a $2.8 million net gain in third quarter 2024.
Income taxes
In third quarter 2025 and 2024, based on the statutory federal tax rate net of discrete federal and state taxes, we had an effective tax rate of 11.2% and 17.0%, respectively. The change in effective tax rate is due to an increase in the amount of Foreign Derived Intangible Income deduction benefit available to the Company and tax benefits related to share-based compensation. In addition, the Company is subject to a decrease in the Global Intangible Low-Tax Income inclusion derived from the decrease in revenue in certain foreign jurisdictions.
First Nine Months 2025 Compared to First Nine Months 2024
Revenue
The following table compares first nine months 2025 revenue to first nine months 2024 revenue (in thousands):
Nine Months Ended September 30,
2025 2024 Increase/(Decrease)
Smartphone $ 555,482 $ 366,931 $ 188,551 51 %
CE, IoT/Auto 119,817 246,905 (127,088) (51) %
Other 486 1,878 (1,392) (74) %
Total Revenue $ 675,785 $ 615,714 $ 60,071 10 %
Catch-up revenue(a), included above
$ 264,791 $ 324,274 $ (59,483) (18) %
(a) Catch-up revenue represents revenue associated with reporting periods prior to the execution of the license agreement.
Total revenue of $675.8 million increased $60.1 million from first nine months 2024 primarily due to revenue from fifteen new patent license agreements signed in the last eighteen months, including the agreement signed with Honor in third quarter 2025 and the previously announced agreements with vivo Mobile, OPPO, Lenovo, and HP. Additionally, the Samsung arbitration ruling contributed to the increase. These increases were partially offset by catch-up revenue recognized in first nine months 2024 from the Samsung TV agreement, Lenovo UK ruling and arbitration agreement, and other new agreements signed during first nine months 2024.
In first nine months 2025 and 2024, 64% and 77% of our total revenue, respectively, was attributable to companies that individually accounted for 10% or more of our total revenue. In first nine months 2025 and 2024, the following companies accounted for 10% or more of our total revenue:
Nine Months Ended September 30,
2025 2024
Customer A 33% 38%
Customer G 16% -%
Customer B 15% 16%
Customer E <10% 23%
Operating Expenses
The following table summarizes the changes in operating expenses between first nine months 2025 and first nine months 2024 by category (in thousands):
Nine Months Ended September 30,
2025 2024 Increase/(Decrease)
Research and portfolio development $ 154,172 $ 147,851 $ 6,321 4 %
Licensing 61,301 149,212 (87,911) (59) %
General and administrative 47,245 41,665 5,580 13 %
Total operating expenses $ 262,718 $ 338,728 $ (76,010) (22) %
Operating expenses decreased 22% to $262.7 million in first nine months 2025 from $338.7 million in first nine months 2024. The $76.0 million decrease in total operating expenses was primarily due to changes in the following items (in thousands):
Increase/(Decrease)
Revenue share $ (71,081)
Intellectual property enforcement (22,405)
Depreciation and amortization
5,317
Net litigation fee reimbursement 3,877
Share-based compensation
2,513
Other 5,769
Total change in operating expenses
$ (76,010)
The $76.0 million decrease in operating expenses was driven by a $71.1 million decrease in revenue share costs primarily related to the Samsung TV and TPV agreements signed in first nine months 2024. Additionally, intellectual property enforcement costs decreased $22.4 million primarily due to resolutions of the OPPO, Lenovo UK, and Samsung matters, partially offset by increases related to the announced Disney proceedings. This decrease in intellectual property enforcement costs was partially offset by one-time contra expenses for net litigation fee reimbursements of $0.5 million in first nine months 2025 compared to $4.4 million in first nine months 2024 resulting from intellectual property enforcement successes.
These decreases were offset by a $5.3 million increase in depreciation and amortization due to non-cash patent acquisitions and investments in internal infrastructure and a $2.5 million increase in share-based compensation due to higher accrual rates driven by licensing successes.
Research and portfolio development expense:Research and portfolio development expense increased slightly compared to first nine months 2024 primarily due to the above noted increase in depreciation and amortization.
Licensing expense: Licensing expense decreased by $87.9 million compared to first nine months 2024 primarily driven by the above-noted decreased revenue share costs and intellectual property enforcement costs, partially offset by the one-time net litigation fee reimbursement.
General and administrative expense:General and administrative expense increased compared to first nine months 2024 primarily due to the above noted increases in share-based compensation and depreciation of internal infrastructure investments.
Non-Operating Income (expense), net
The following table compares first nine months 2025 non-operating income, net to first nine months 2024 non-operating expense, net (in thousands):
Nine Months Ended September 30,
2025 2024 Increase/(Decrease)
Interest expense $ (29,427) $ (34,086) $ 4,659 14 %
Interest and investment income 27,576 31,078 (3,502) (11) %
Other non-operating income, net 8,014 2,405 5,609 233 %
Total non-operating income (expense), net
$ 6,163 $ (603) $ 6,766 1,122 %
The change in non-operating income (expense), net was primarily due to a foreign currency translation net gain arising from translation of our foreign subsidiaries of $5.9 million in first nine months 2025, compared to a $0.5 million net loss in first nine months 2024.
Income Taxes
In first nine months 2025 and 2024, we had an effective tax rate of 13.3% and 18.4%, respectively. The change in effective tax rate is due to an increase in the amount of Foreign Derived Intangible Income deduction benefit available to the Company and tax benefits related to share-based compensation. In addition, the Company is subject to a decrease in the Global Intangible Low-Tax Income inclusion derived from the decrease in revenue in certain foreign jurisdictions.
STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include certain information regarding our current beliefs, plans and expectations, including, without limitation, the matters set forth below. Words such as "believe," "anticipate," "estimate," "expect," "project," "intend," "plan," "forecast," "goal," "could," "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," and variations of any such words or similar expressions contained herein are intended to identify such forward-looking statements. Forward-looking statements are made on the basis of management's current views and assumptions and are not guarantees of future performance. Although the forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements concerning our business, results of operations and financial condition are inherently subject to risks and uncertainties. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Part I, Item 1A of our 2024 Form 10-K and the risks and uncertainties set forth below:
•unanticipated delays or difficulties in the execution of patent license agreements on acceptable terms or at all;
•our ability to expand our revenue opportunities by entering into licensing arrangements with streaming and cloud-based service providers;
•the resolution of legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith;
•our ability to successfully integrate Deep Render and to recognize the anticipated benefits of the transaction;
•our ability to maintain a strong patent portfolio and make strategic decisions related to our intellectual property protection;
•the failure of markets for our technologies to materialize to the extent that we expect;
•our continued ability to develop new technologies;
•changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the One Big Beautiful Bill Act, the 2017 Tax Cuts and Jobs Act and other U.S. and non-U.S. tax laws;
•the timing and impact of potential regulatory, administrative and legislative matters;
•the potential effects of macroeconomic conditions or trade conflicts;
•our ability to hire and retain key personnel;
•operational risks, including cybersecurity events, human failures or other difficulties with our information technology systems; and
•risks related to any new accounting standards or our assumptions and application of relevant accounting standards, including with respect to revenue recognition.
You should carefully consider these factors before making any investment decision with respect to our common stock. These factors, individually or in the aggregate, may cause our actual results to differ materially from our expected and historical results. You should understand that it is not possible to predict or identify all such factors. In addition, you should not place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law.
InterDigital Inc. published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 12:35 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]